Cash Paymaster Services (CPS) has come under fire for reportedly using the social grants database to market airtime to social grant beneficiaries and exploiting the poor.
CPS, a Net1 subsidiary, won a multimillion-rand tender last year to administrate and distribute South African Social Security Agency (SASSA) grants across the country. CPS also sells airtime - through a solution named Umoya Manje - which it is accused of marketing through the SASSA database, along with other products.
The airtime is sourced from parent company, Net1 UEPS Technologies' subsidiary Net1 Mobile Solutions.
An insider at Net1 told ITWeb the airtime is sold to social grant beneficiaries in R5 bundles on a credit basis, and the amount of R5.50 gets deducted from the beneficiary's social grant the following month. Supposedly only the SASSA card number is needed to purchase the airtime, leaving the system open to fraudsters to buy large amounts of airtime and then resell it with an increased profit margin.
Social development minister Bathabile Dlamini is reportedly fuming about this practice, accusing CPS of being "reactionary" and not having the interest of the poor at heart. Apparently, Dlamini would like to see beneficiaries use their social grants for basic necessities and does not condone airtime being purchased against the grants.
Media reports claim Dlamini met with CPS management last week to discuss the matter and is consulting with a legal team on the way forward. Neither CPS nor Dlamini's spokesperson, Lumka Oliphant, were able to respond by the time of publication.
Democratic Alliance shadow minister of social development, Mike Waters, says the allegations must be investigated by minister Dlamini. "Nobody should be exploiting [social grant] beneficiaries within the boundaries of grants being distributed. That is supposed to be a safe zone.
"CPS using their position to sell airtime and give loans is an abuse of their power. There should actually be penalty clauses in their contract, and we hope there are and that the minister will look into this matter."
This is not the first time CPS's practices have come under the microscope. In May, public protector Thuli Madonsela confirmed she will conduct a preliminary investigation into allegations that the company has been operating an illegal loan scheme targeting social grant beneficiaries.
According to Waters, it is alleged that CPS officials offer and provide certain beneficiaries "interest-free" microloans with repayments automatically deducted from their social grants - some with interest rates as high as 50%. "These practices are not only a contravention of the Social Assistance Act, but a blatant manipulation of some of the most vulnerable members of our society."
He says no update on the investigation has been given to date.
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